Name: __________________________________ Roll Number_____________________________

AD (BA) 1st (M) / AD (CS) 1st (E) Final Term Exam: Fall, 2020
Course Title: Financial Accounting Course Code: COM-301 /AAF-302
*OBJECTIVE PART* Marks: 100 (100*1)

SR Course Code Question Statement

1 BMS-403 Which of the following statements is incorrect?
a) Assets = Liabilities + Capital
b) Liabilities + Assets = Capital
c) Liabilities + Capital = Assets
d) Assets - Liabilities = Capital
2 BMS-403 Which of the following is not an asset?
a) Buildings
b) Debtors
c) Loan from Ali
d) Cash balance
3 BMS-403 Which of the following is a liability?
a) Motor Vehicles
b) Machinery
c) Creditors for goods
d) Cash at Bank
4 BMS-403 Which of the following best describes a trial balance?
a) Shows all the entries in the books
b) It is a list of balances on the books
c) Shows the financial position of a business
d) It is a special account
5 BMS-403 Is it true that the trial balance totals should agree?
a) No, there are sometimes good reasons why they differ
b) Yes, always
c) Yes, except where the trial balance is extracted at the year end
d) No, because it is not a balance sheet
6 BMS-403 Gross profit is:
a) Cost of goods sold + Opening stock
b) Excess of sales over cost of goods sold
c) Sales less Purchases
d) Net profit less expenses of the period
7 BMS-403 Net profit is calculated in the:
a) Profit and loss account
b) Balance sheet
c) Trial balance
d) Trading account
8 BMS-403 To find the value of closing stock at the end of a period we
a) do this by stocktaking
b) deduct cost of goods sold from sales
c) deduct opening stock from cost of goods sold
d) look in the stock account
9 BMS-403 The credit entry for net profit is on the credit side of:
a) The trading account
b) The drawings account
c) The capital account
d) The profit and loss account
10 BMS-403 Which of these best describes a balance sheet?
a) A statement of assets
b) A listing of balances
c) An account proving the books balance
d) A record of closing entries
11 BMS-403 The descending order in which current assets should be shown in the balance
sheet is:
a) Debtors, Stock, Bank, Cash
b) Cash, Bank, Debtors, Stock
c) Stock, Debtors, Cash, Bank
d) Stock, Debtors, Bank, Cash
13 BMS-403 Which of these best describes fixed assets?
a) Are bought to be used in the business
b) Are expensive items bought for the business
c) Are items which will not wear out quickly
d) Are of long life and are not bought specifically for resale
14 BMS-403 Carriage inwards is charged to the trading account because:
a) Carriage outwards goes in the profit and loss account
b) It is an expense connected with buying goods
c) It is not part of motor expenses
d) It should not go in the balance sheet
15 BMS-403 The costs of putting goods into a saleable condition should be charged to:
a) Trading account
b) Profit and loss account
c) Balance sheet
d) None of these
16 BMS-403 Suppliers’ personal accounts are found in the:
a) Sales ledger
b) Nominal ledger
c) Purchases ledger
d) General ledger
17 BMS-403 The Sales Day Book is best described as:
a) Containing customers’ accounts
b) Containing real accounts
c) Part of the double entry system
d) A list of credit sales
18 BMS-403 Which of the following are personal accounts?
a) Creditors
b) Debtors
c) Wages
d) a & b
19 BMS-403 When Ali makes out a cheque for Rs. 1000 and sends it to Ahmad, then Ali is
known as:
a) The payee
b) The banker
c) The drawer
d) The creditor
20 BMS-403 If you want to make sure that your money will be safe if Cheques sent are
lost in the post, you should:
a) Always pay by cash
b) Cross your Cheques ‘Account Payee only, Not Negotiable’
c) Always take the money in person
d) Not use the postal service in future
21 BMS-403 When banking money in to your current account you should always use:
a) A general ledger
b) A cheque book
c) A cash book
d) A paying-in slip
22 BMS-403 A debit balance of Rs. 100 in a cash account shows that:
a) There was Rs. 100 cash in hand
b) The total of cash received was less than Rs. 100
c) Rs. 100 was the total of cash paid out
d) Cash has been overspent by Rs. 100
23 BMS-403 Rs. 50 cash taken from the cash till and banked is entered:
a) Debit cash column Rs. 50: Credit bank column Rs. 50
b) Debit bank column Rs. 50: Credit bank column Rs. 50
c) Debit bank column Rs. 50: Credit cash column Rs. 50
d) Debit cash column Rs. 50: Credit cash column Rs. 50
24 BMS-403 A credit balance of Rs. 200 on the cash columns of the cash book would
mean:
a) We have Rs. 200 cash in hand
b) Someone has stolen Rs. 200 cash
c) We have spent Rs. 200 more than we have received
d) The bookkeeper has made a mistake
25 BMS-403 ‘Posting’ the transactions in bookkeeping means:
a) Making the second entry of a double entry transaction
b) Entering items in a cash book
c) Making the first entry of a double entry transaction
d) Something other than the above
26 BMS-403 A cash discount is best described as a reduction in the sum to be paid:
a) If payment is made by cash, not cheque
b) If purchases are made for cash, not on credit
c) If payment is made either by cash or cheque
d) If payment is made within a previously agreed period
27 BMS-403 Discounts received are:
a) Deducted by us when we pay our accounts
b) Deducted when we receive cash
c) Given by us when we sell goods on credit
d) None of above
28 BMS-403 The total of the ‘Discounts Allowed’ column in the Cash Book is posted to:
a) The debit of the Discounts Received account
b) The debit of the Discounts Allowed account
c) The credit of the Discounts Allowed account
d) The credit of the Discounts Received account
29 BMS-403 Sales invoices are first entered in:
a) The Cash Book
b) The Purchases Journal
c) The Sales Journal
d) The Sales Account
30 BMS-403 The total of the Sales Journal is entered on:
a) The debit side of the Sales Account in the General Ledger
b) The credit side of the General Account in the Sales Ledger
c) The credit side of the Sales Account in the General Ledger
d) The debit side of the Sales Day Book
31 BMS-403 Given a purchases invoice showing 5 items of Rs. 80 each, less trade discount
of 25 % and cash discount of 5 %, if paid within the credit period, your
cheque would be made out for:
a) Rs. 260
b) Rs. 280
c) Rs. 285
d) None of above
32 BMS-403 An alternative name for a Sales Journal is:
a) Sales Day Book
b) Sales Ledger
c) Sales Invoice
d) Daily Sales
33 BMS-403 Entered in the Purchases Journal are:
a) Discounts received
b) Purchases invoices
c) Payments to suppliers
d) Trade discounts
34 BMS-403 The total of the Purchases Journal is transferred to the:
a) Credit side of the Purchases Account
b) Credit side of the Purchases Book
c) Debit side of the Purchases Account
d) Debit side of the Purchases Day Book
35 BMS-403 Credit notes issued by us will be entered in our:
a) Sales Account
b) Returns Outwards Journal
c) Returns Inwards Journal
d) Returns Inwards Account
36 BMS-403 The total of the Returns Outwards Journal is transferred to:
a) The debit side of the Returns Outwards Account
b) The credit side of the Returns Outwards Book
c) The credit side of the Returns Outwards Account
d) The debit side of the Purchases Returns Book
37 BMS-403 Depreciation is:
a) The salvage value of a fixed asset
b) The amount of money spent in replacing assets
c) The part of the cost of the fixed asset consumed during its period of use by
the firm
d) The amount spent to buy a fixed asset
38 BMS-403 At the balance sheet date the balance on the Accumulated Provision for
Depreciation Account is:
a) Transferred to Depreciation Account
b) Transferred to the Asset Account
c) Transferred to Profit and Loss Account
d) Simply deducted from the asset in the Balance Sheet
39 BMS-403 In the trial balance the balance on the Provision for Depreciation Account is:
a) Not shown, as it is part of depreciation
b) Sometimes shown as a credit, sometimes as a debit
c) Shown as a credit item
d) Shown as a debit item
40 BMS-403 If an accumulated provision for depreciation account is in use then the
entries for the year’s depreciation would be
a) Credit Asset Account, debit Provision for Depreciation Account
b) Debit Asset Account, credit Profit and Loss Account
c) Credit Provision for Depreciation Account, debit Profit and Loss Account
d) Credit Profit and Loss Account, debit Provision for Depreciation Account
41 BMS-403 When the final accounts are prepared, the Bad Debts Account is closed by a
transfer to the:
a) Trading Account
b) Provision for Doubtful Debts Account
c) Balance Sheet
d) Profit and Loss Account
42 BMS-403 A Provision for Doubtful Debts is created:
a) When debtors cease to be in business
b) To provide for possible bad debts
c) When debtors become bankrupt
d) To write off bad debts
43 BMS-403 Working Capital is a term meaning:
a) The total of Fixed Assets - Current Assets
b) The capital less drawings
c) The amount of capital invested by the proprietor
d) The excess of the current assets over the current liabilities
44 BMS-403 A credit balance brought down on a Rent Account means:
a) We have paid too little in rent
b) We have paid too much rent
c) We owe that rent at that date
d) We have paid that rent in advance at that date
45 BMS-403 A debit balance brought down on a Packing Materials Account means:
a) We have a stock of packing materials unused
b) We are owed for packing materials
c) We have lost money on packing materials
d) We owe for packing materials
46 BMS-403 If we take goods for own use we should:
a) Debit Drawings Account: Credit Purchases Account
b) Debit Drawings Account: Credit Stock Account
c) Debit Sales Account: Credit Stock Account
d) Debit Purchases Account: Credit Drawings Account
47 BMS-403 Capital Expenditure is:
a) The costs of running the business on a day-to-day basis
b) Money spent on buying fixed assets or adding value to them
c) Money spent on selling fixed assets
d) The extra capital paid in by the proprietor
48 BMS-403 In the business of C Songster, who owns a clothing store, which of the
following is Capital Expenditure?
a) Shop furniture bought
b) New van bought
c) Petrol for van
d) a & b
49 BMS-403 If Rs. 5000 was shown added to Purchases instead of being added to a fixed
asset:
a) Net profit only would be overstated
b) Both gross and net profits would be understated
c) Net profit only would be understated
d) It would not affect net profit
50 BMS-403 A cheque paid by you, but not yet passed through the banking system, is:
a) A credit transfer
b) A dishonored cheque
c) An un-presented cheque
d) A standing order
51 BMS-403 A Bank Reconciliation Statement is a statement:
a) Sent by the bank when we have made an error
b) Drawn up by the bank to verify the cash book
c) Sent by the bank when the account is overdrawn
d) Drawn up by us to verify our cash book balance with the bank statement
balance
52 BMS-403 Which of these errors would be disclosed by the trial balance?
a) A purchase of Rs. 250 was omitted entirely from the books
b) Credit sales of Rs. 300 entered in both double entry accounts as Rs. 30
c) Selling expenses had been debited to Sales Account
d) Cheque Rs. 95 from Asim entered in Asim’s account as Rs. 59
53 BMS-403 When a petty cash book is kept there will be:
a) No entries made at all in the general ledger for items paid by petty cash
b) The same number of entries in the general ledger
c) Fewer entries made in the general ledger
d) More entries made in the general ledger
54 BMS-403 Which of the following do not affect trial balance agreement?
a) Sales Rs. 105 to Ahmad entered in Umair’s account
b) Wages account added up incorrectly, being totaled Rs. 100 too much.
c) Purchases Rs. 440 from Ali entered in both accounts as Rs. 404
d) None of Above
55 BMS-403 Which of the following are not errors of principle?
a) Sale of Rs. 250 to Imran completely omitted from books
b) Sale to Ali entered in Ahmad’s account
c) Motor expenses entered in Motor Vehicles account
d) a & b
56 BMS-403 Errors are corrected via the Journal because:
a) It saves the bookkeeper’s time
b) It provides a good record explaining the double entry records
c) It saves entering them in the ledger
d) It is much easier to do
57 BMS-403 If a trial balance totals do not agree, the difference must be entered in:
a) The Profit and Loss Account
b) A Nominal Account
c) The Capital Account
d) A Suspense Account
58 BMS-403 What we should do before posting error in Suspense Account.
a) Write it off to Profit and Loss Account
b) Should be written off to the balance sheet
c) Carry forward the balance to the next period
d) Find the error(s) before publishing the final accounts
59 BMS-403 In a Sales Ledger Control Account the Bad Debts written off should be
shown in the account:
a) As a credit
b) As a debit
c) As a balance carried down
d) Both as a debit and as a credit
60 BMS-403 If cost price is Rs. 90 and selling price is Rs. 120, then:
a) Mark-up is 25 %
b) Mark-up is 35 %
c) Mark-up is 35 %
d) Mark-up is 45 %
61 BMS-403 Given cost of goods sold Rs. 16,000 and margin of 25%, then sales figure is:
a) Rs. 21,000
b) Rs. 20,000
c) Rs. 16,000
d) Rs. 20,160
62 BMS-403 Given opening capital of Rs. 16,500, closing capital as Rs. 11,350 and
drawings were Rs. 3,300, then:
a) Profit for the year was Rs. 8,450
b) Loss for the year was Rs. 8,450
c) Profit for the year was Rs.1,850
d) Loss for the year was Rs. 1,850
63 BMS-403 A Receipts and Payments Account is one:
a) In which the surplus of income over expenditure is calculated
b) In which the opening and closing cash balances are shown
c) Which is accompanied by a balance sheet
d) In which the profit is calculated
64 BMS-403 Which of the following should be charged in the Profit and Loss Account?
a) Carriage outward
b) Work in progress
c) Office rent
d) a & c
65 BMS-403 Where there is no partnership agreement then profits and losses:
a) Must be shared equally
b) Must be shared in same proportion as capitals
c) Must be shared equally after adjusting for interest on capital
d) None of these
66 BMS-403 If it is required to maintain fixed capitals then the partners’ shares of profits
must be:
a) Credited to capital accounts
b) Debited to capital accounts
c) Debited to partners’ current accounts
d) Credited to partners’ current accounts
67 BMS-403 You are to buy an existing business which has assets valued at buildings Rs.
50,000, Motor vehicles Rs. 15,000, Fixtures Rs. 5,000 and Stock Rs. 40,000.
You are to pay Rs. 140,000 for the business. This means that:
a) You have made an arithmetical mistake
b) You are paying Rs. 40,000 for Goodwill
c) Buildings are costing you Rs. 30,000 more than their value
d) You are paying Rs. 30,000 for Goodwill
68 BMS-403 Assets can be revalued in a partnership change because:
a) The depreciation charged on them needs to be reversed
b) It helps prevent injustice to some partners
c) The law insists upon it
d) Inflation affects all values
69 BMS-403 Any loss on revaluation is:
a) Debited to old partners in old profit-sharing ratios
b) Credited to old partners in old profit-sharing ratios
c) Credited to new partners in new profit-sharing ratios
d) Debited to new partners in new profit-sharing ratios
70 BMS-403 The Issued Capital of a company is:
a) Always the same as the Authorized Capital
b) The same as Preference Share Capital
c) Equal to the reserves of the company
d) None of the above
71 BMS-403 All the transactions measurable in the terms of money are recorded in
accounts is according to
a) Going Concern Concept
b) Capital Concern Concept
c) Money Measurement Concept
d) Accounting Period Concept
72 BMS-403 While putting the value or price of ANTHING in financial records the lowest
price is recorded not the current price or current market value. This is
known as
a) Business Entity Concept
b) Conservatism Concept
c) Cost Concept
d) Money Measurement Concept
73 BMS-403 Outstanding salary account is a
a) Natural Personal Account
b) Artificial Personal Account
c) Representative Personal Account
d) Real Account
74 BMS-403 Interest earned is a
a) Personal Account
b) Real Account
c) Nominal Account
d) Representative Personal Account
75 BMS-403 Commission paid is a
a) Personal Account
b) Real Account
c) Nominal Account
d) Representative Personal Account
76 BMS-403 Profit and loss account is a
a) Personal Account
b) Real Account
c) Nominal Account
d) Representative Personal Account
77 BMS-403 A ________ is an organization in which basic resources (inputs), such as
materials and labor, are assembled and processed to provide goods or
services (outputs) to customers
a) Business
b) Organization
c) Proprietorship
d) Partnership
78 BMS-403 Honda, Toyota, and Airbus are involved in _______ business.
a) Service
b) Manufacturing
c) Trading
d) Merchandising
79 BMS-403 Liability of corporation’ member is unlimited.
a) True
b) False
80 BMS-403 The rights of the owners are called stockholders’ equity for a corporation
a) Investment
b) Stakeholder Equity
c) Stockholder Equity
d) Portfolio
81 BMS-403 In single entry system every transaction has double aspect.
a) True
b) False
82 BMS-403 Accounting Cycle:
a) Journal, Ledger, Trial balance, & Final account
b) Journal, Trial balance, Ledger, & Final account
c) Transaction, Journal, Ledger, Trial balance, & Final account
d) Ledger, Journal, Trial balance, & Final account
83 BMS-403 If the Debit side of Ledger is greater than Credit side, then Balance c/d is:
a) Debit Balance
b) Credit Balance
c) Credit Debit Balance
d) None of above
84 BMS-403 If both side of Ledger is equal, it means that:
a) Debit side is greater than credit side
b) Credit side is greater than debit side
c) There is no debit and credit balance available
d) None of Above
85 BMS-403 Paid Rs. 90,000 to Ahmad in full settlement of his account of Rs. 95,000
a) Debit Ahmad a/c 95,000 : Credit Cash a/c 90,000 & Discount a/c 5,000
b) Credit Ahmad a/c 90,000 : Debit Cash a/c 90,000
c) Debit Ahmad a/c 90,000 : Credit Cash a/c 90,000
86 d) Credit Ahmad a/c 95,000 : Debit Cash a/c 90,000 & Discount a/c 5,000
BMS-403 Machinery purchased from Umar Son’s and cash paid Rs. 500,000.
a) Debit Machinery a/c Rs. 500,000 Credit Cash a/c Rs. 500,000
b) Debit Purchase a/c Rs. 500,000 Credit Cash a/c Rs. 500,000
c) Debit Asset a/c Rs. 500,000 Credit Cash a/c Rs. 500,000
d) Debit Cash a/c Rs. 500,000 Credit Machinery a/c Rs. 500,000
87 BMS-403 On January 1, 2020, Business started with Cash Rs. 6,000 and Furniture Rs.
2,000.
a) Debit Cash a/c 6000, Furniture a/c 2000, Credit a/c Capital 8,000
b) Debit Cash a/c 6000, Credit a/c Capital 8,000
c) Debit Cash a/c 6000, Credit a/c Furniture a/c 2000, Capital 8,000
d) Credit Cash a/c 6000, Asset a/c 2000, Debit a/c Capital 8,000
88 BMS-403 On January 1, 2020, goods purchased from Asif on credit Rs. 15,000.
a) Debit Purchase a/c Rs. 15,000, Credit Asif a/c Rs. 15,000
b) Credit Purchase a/c Rs. 15,000, Debit Asif a/c Rs. 15,000
c) Debit Asif a/c Rs. 15,000, Credit Purchase a/c Rs. 15,000
d) Credit Asif a/c Rs. 15,000, Debit Purchase a/c Rs. 15,000
89 BMS-403 On January 3, 2020, goods sell to Ali Rs. 28,000 and cash received.
a) Debit Purchase a/c Rs. 28,000, Credit Cash a/c Rs. 28,000
b) Debit Purchase a/c Rs. 28,000, Debit Ali a/c Rs. 28,000
c) Debit Alia/c Rs. 28,000, Credit Purchase a/c Rs. 28,000
d) Credit Ali a/c Rs. 28,000, Debit Purchase a/c Rs. 28,000
90 BMS-403 On January 5, 2020, goods worth Rs. 14,000 sell to Shahid.
a) Debit Cash a/c Rs. 14,000, Credit Sale a/c Rs. 14,000
b) Credit Shahid a/c Rs. 14,000, Credit Sale a/c Rs. 14,000
c) Debit Shahid a/c Rs. 14,000, Credit Sale a/c Rs. 14,000
 d) Credit Shahid a/c Rs. 14,000, Debit Sale a/c Rs. 14,000
91 BMS-403 Office chair worth Rs. 8,000 bought on cash.
a) Debit Office Equipment a/c Rs. 8,000, Credit Sale a/c Rs. 8,000
b) Credit Cash a/c Rs. 8,000, Credit Office Equipment a/c Rs. 8,000
c) Debit Office Equipment a/c Rs. 8,000, Credit Cash a/c Rs. 8,000
d) Credit Office Equipment a/c Rs. 8,000, Debit Cash a/c Rs. 8,000
92 BMS-403 Goods purchased from Ali Rs. 30,000 and cash paid Rs. 15,000.
a) Debit Purchase a/c Rs. 30,000, Credit Cash a/c Rs. 15,000 & Ali a/c Rs.
15,000.
b) Credit Purchase a/c Rs. 30,000, Debit Cash a/c Rs. 15,000 & Ali a/c Rs.
15,000.
c) Debit Purchase a/c Rs. 30,000, Credit Cash a/c Rs. 30,000
d) Debit Purchase a/c Rs. 30,000, Credit Ali a/c Rs. 30,000.
93 BMS-403 Goods sold to Rahim Rs. 10,000 and he paid Rs. 9,500 before due date in full
settlement.
a) Debit Cash a/c Rs. 9,500 & Discount a/c Rs. 500, Credit Rahim a/c Rs.
10,000.
b) Debit Cash a/c Rs. 10,000, Credit Rahim a/c Rs. 10,000.
c) Debit Cash a/c Rs. 9,500 & Discount a/c Rs. 500, Credit Sales a/c Rs.
10,000.
d) Credit Cash a/c Rs. 9,500 & Discount a/c Rs. 500, Debit Rahim a/c Rs.
10,000.
94 BMS-403 ABC Co. paid salary to his employees Rs. 5,000.
a) Debit Salaries a/c Rs. 5,000, Credit Cash a/c Rs. 5,000.
b) Debit ABC Co. a/c Rs. 5,000, Credit Cash a/c Rs. 5,000.
c) Debit Employee a/c Rs. 5,000, Credit Cash a/c Rs. 5,000.
d) Credit Bank a/c Rs. 5,000, Debit Salaries a/c Rs. 5,000.
95 BMS-403 Commission received through cheque Rs. 4500.
a) Debit Bank a/c Rs. 4,500, Credit Commission a/c Rs. 4,500.
b) Debit Cheque a/c Rs. 4,500, Credit Revenue a/c Rs. 4,500.
c) Debit Cash a/c Rs. 4,500, Credit Commission a/c Rs. 4,500.
d) Debit Bank a/c Rs. 4,500, Credit Revenue a/c Rs. 4,500.
96 BMS-403 Carriage inward Rs. 500 recorded and payable to Ali.
a) Debit Carriage Inward a/c Rs. 500, Credit Ali a/c Rs. 500.
b) Debit Carriage Inward a/c Rs. 500, Credit Bank a/c Rs. 500.
c) Debit Carriage Inward a/c Rs. 500, Credit Cash a/c Rs. 500.
d) Credit Carriage Inward a/c Rs. 500, Debit Cash a/c Rs. 500.
97 BMS-403 Ali deposited cash into bank Rs. 5,000.
a) Debit Bank a/c Rs. 5,000, Credit Cash a/c Rs. 5,000.
b) Debit Ali a/c Rs. 5,000, Credit Bank a/c Rs. 5,000.
c) Debit Cash a/c Rs. 5,000, Credit Ali a/c Rs. 5,000.
d) Debit Bank a/c Rs. 5,000, Credit Cheque a/c Rs. 5,000.
98 BMS-403 Goodwill amount Rs. 100,000 paid through cheque.
a) Debit Goodwill a/c Rs. 100,000, Credit Bank a/c Rs. 100,000.
b) Debit Goodwill a/c Rs. 100,000, Credit Cash a/c Rs. 100,000.
c) Debit Business a/c Rs. 100,000, Credit Bank a/c Rs. 100,000.
d) Debit Business a/c Rs. 100,000, Credit Cash a/c Rs. 100,000.
99 BMS-403 Rs. 11,750 received from Imran and discount allowed Rs. 250.
a) Debit Cash a/c Rs. 11,750 & Discount a/c Rs. 200, Credit Imran a/c Rs.
12,000.
b) Debit Cash a/c Rs. 11,750, Credit Imran a/c Rs. 11,750.
c) Debit Bank a/c Rs. 11,750 & Discount a/c Rs. 200, Credit Imran a/c Rs.
12,000.
d) Debit Bank a/c Rs. 11,750, Credit Imran a/c Rs. 11,750.
10 BMS-403 Goods bought from Qamar Rs. 100,000, Rs. 50,000 paid in cash and
0 remaining through cheque.
a) Debit Purchase a/c Rs. 100,000, Credit Cash a/c Rs. 50,000 & Bank a/c Rs.
50,000.
b) Debit Purchase a/c Rs. 100,000, Credit Cash a/c Rs. 100,000.
c) Debit Purchase a/c Rs. 100,000, Credit Bank a/c Rs. 100,000.
d) Debit Goods a/c Rs. 100,000, Credit Cash a/c Rs. 50,000 & Bank a/c Rs.
50,000.
10 BMS-403 What types of expenses are paid out of gross profit?
1
a) General Expenses
b) Financial Expenses
c) Selling Expenses
d) All of the above
10 BMS-403 Which of the following is NOT an example of intangible asset?
2
a) Franchise Rights
b) Goodwill
c) Parents
d) Land
10 BMS-403 Which of the following is an example of business liability?
3
a) Land
b) Building
c) Cash
d) Creditors
10 BMS-403 The unfavorable balance of profit and loss account should be
4
a) Added to liabilities
b) Subtracted from current assets
c) Subtracted from capital
d) Subtracted from liability
10 BMS-403 Which of the following account will be credited, if business bough goods on
5 credit from Mr. Z.
a) Purchase Account
b) Mr. Z Account
c) Cash Account
d) Sales Account
10 BMS-403 Interest on loan paid by business is an example
6
a) Revenue Expense
b) Income
 c) Asset
d) Return Outward

10 BMS-403 Which of the following account will be credited when a typewriter is sold that
7 has been used in the office.
a) Office equipment account
b) Cash Account
c) Sales Account
d) Purchase Account
10 BMS-403 What types of expenses are paid out of gross profit.
8
a) General Expenses
b) Financial Expenses
c) Selling Expenses
d) All of the above
10 BMS-403 If an accumulated provision for depreciation account is in use then the
9 entries for the year’s depreciation would be
a) Credit Asset Account, debit Provision for Depreciation Account
b) Debit Asset Account, credit Profit and Loss Account
c) Credit Provision for Depreciation Account, debit Profit and Loss Account
d) Credit Profit and Loss Account, debit Provision for Depreciation Account
11 BMS-403 What we should do before posting error in Suspense Account.
0
a) Write it off to Profit and Loss Account
b) Should be written off to the balance sheet
c) Carry forward the balance to the next period
d) Find the error(s) before publishing the final accounts